California Court Rules Wages Must be Paid for All Hours Worked

One of the things that keeps conscientious employers and labor law hounds on their toes are disconnects between state labor laws and those of the federal government. While these frequent hiccups might seem like an inefficiency they serve to allow states to inject local wisdom to local issues as well as keep the federal laws fresh and applicable to modern times. In California, such an inconsistency was recently ruled on by the California Supreme Court.

The landmark federal Fair Labor Standard Act governs a big chunk of labor laws including but not limited to federal minimum wage and overtime pay. The Act’s de minimis doctrine excuses the payment of wages for small amounts of work that are administratively difficult to record. In employment cases, this applies to duties that take place before workers have clocked in or after they’ve clocked out, sometimes taking a few seconds or minutes. A shift manager at Starbuck’s sued the company arguing that Starbuck’s invocation of the de minimis doctrine constituted unpaid wages under California law.

The manager was required to clock out and then close up the store, about a 5-10 minute procedure. Starbucks felt this extra work was work and compensable, but since it occurred outside the store after hours it was hard to record and therefore didn’t need to be paid as a wage under the de minimis doctrine. The manager felt this work was regular duty and with modern technology was easily recordable and therefore should have been included in his wage.

The Court ruled in favor of the employee but in a very narrow way. It found that since California wage laws had not adopted the de minimis doctrine it does not apply to California law. Now, most of you employers (especially in California) are probably wondering how this applies to you but the bad news is it’s not so clear. That’s because the court did not set a standard as to what amount of time or types of work are considered “difficult to record.” It did note that advances in technology have made it easier to record times and tasks that previously were difficult to record from an administrative standpoint. So, while rounding your employees’ hours up may still be legal, it’s best to minimize the practice wherever possible and, of course, eliminate any essential duties that fall outside of clocked hours.